The present invention relates to portable payment devices, and in particular to smart portable charge payment devices that store a record of recent payment transactions.
Charge cards of different kinds are commonly used for financial transactions. A credit card is a charge card that accumulates debt. The owner of a credit card is required to settle payment periodically. Debit cards are charge cards that promptly deduct payment from an account held by the cardholder. Most charge cards have a magnetic strip encoded with information identifying the credit or bank account associated with the charge card. Many charge cards are also embossed with the account identification data to allow its imprinting on paper forms.
With the advent of smart cards, a new type of charge card has emerged under a de-facto standard called EMV after Europay, MasterCard and Visa. A smart card, when used as a charge card, allows a smart card reader to authenticate the cardholder by presenting a personal identification number (PIN) or biometric signature. Methods for authenticating a smart card include data transfer using tamper resistant hardware and encrypted data transfer protocols. Some smart cards (“contact cards”) use electrical contacts to interface with their compatible readers, while other smart cards (“contactless cards”) use radio frequency (RF) for such interface. The latter case allows embedding charge card functionality within a variety of form factors in addition to the traditional plastic card, which include keyfobs, cellular telephones, watches, etc.
Card payment has become the target of a substantial amount of fraud. A cardholder is usually not liable for damages caused by fraud, either by agreement with the charge card issuer or by law. However, the cardholder is required to detect and identify fraudulent charges to his account. For this purpose, a statement is sent periodically to the card holder, detailing the transactions billed to his/her account, and the cardholder is required to check all transactions line by line and compare each transaction with receipts or records, if he/she keeps receipts or maintains records, and if not he/she is expected to detect and identify fraud based on memory or common sense.
FIG. 1 (prior art) describes a common charge payment system 100. A cardholder 102 submits (step 105) a charge card 110 for payment (step 115). Card 110 includes a payment module 114, e.g. a magnetic strip or a smart chip, to identify the account and authorize payment from the account. Charge card 110 interfaces with a merchant point of sale (POS) 120. At merchant POS 120 the payment amount is entered manually by the merchant or received automatically from a scanner or from an automatic vending machine. Transaction details including account details, payment amount and time are sent (step 125) as a payment claim by merchant POS 120 to a merchants acquirer server 130. The claim is sent (step 135) from acquirer server 130 to an issuer server 140 of the card issuer of charge card 110. Receipt by issuer server 140 causes charging (not shown) the payment amount to the respective credit or bank account, and issuing (step 145) a report record 147 to the cardholder, usually as a line item in a monthly statement. Report record 147 typically includes the merchant identity, the purchase date and the payment amount. Cardholder 102 is then required to compare each report record 147 in his monthly statement to receipts, records and memorized events, in order to verify or dispute each line item.
Charge payment system 100 includes a settlement system 136 that includes acquirer server 130 operative to receive claims from merchants and issuer server 140 operative to collect money from cardholders and to issue monthly statements to the cardholders. Settlement system 136 is common for credit and debit cards issued by financial institutions. An alternative settlement system includes a single server that manages both the acquiring tasks (i.e. receiving claims from merchants) and issuing tasks (i.e. collecting money from cardholders and issuing monthly statement).
The more transactions one makes using the card, the more cumbersome, time consuming and prone to error does the review of the monthly statement become. Also, the associated need to keep receipts and records has become a hassle for many.
There is thus a need for and it would be highly advantageous to have a better way to compare between transactions made by the cardholder and transactions charged and reported to the cardholder by the issuer.